Indian CEOs fall into three broad categories: affable heirs; professionals who rose through the ranks; and VC funded, start-up entrepreneurs. Anil Naik defies categorisation.
Ascension in L&T
In 1964, Naik was interviewed by two Europeans, Baker and Hanson. That interview led to Naik’s joining L&T on 15 March 1965. At the construction major, he ran into a medley of characters. As Planning-in-charge, Naik was to deal with stores, dispatch and warehouse. He chose to operate from the shop floor rather than sitting in his air-conditioned office. The committment kick started Naik’s ascension in L&T, and he received six promotions in nine years! In 1989, he became director and in 1999, he was anointed CEO.
Of Hazira and Kattupalli
L&T’s 755-acre manufacturing facility in Hazira, on the outskirts of Surat, radiates green, disciplined and tranquil. The vast complex was built in thirty months. If Hazira is L&T’s muscle, Vadodara is its brain. In 1997 came Vadodara’s first project which was with Chiyoda, a Japanese engineering company. They went on to form many joint ventures. Naik ensured that L&T had at least 51 per cent stake in all.
Soon, L&T became an attractive target for take-over by one of India’s largest business houses, Reliance. There was a bitter struggle to thwart the raid and finally led to Relaince staying as silent investor through the 1990s until the Ambanis sold their stake to the Birlas in 2001. To save L&T from getting acquired, Naik sold the cement business to Grasim Industries. An Employees’ Welfare Association was then formed to acquire the stake held by Grasim Industries and its subsidiaries. This was crafted carefully to present future take-over attempts.
With prospects of defence sector brightening, Naik decided to focus on naval vessels. The facility at Kattupalli on coastal Tamil Nadu, comprises a shipbuilding yard, modular fabrication yard for hydrocarbon projects and associated units. L&T received an order from the coast guard to build seven offshore vessels in February 2015. These ships were capable of carrying a helicopter too, which significantly empowered the Indian coast guard. Another significant project which L&T got was to design and deliver twelve fast attack ships for the Vietnamese coast guard.
Decoding the leader
There are two outstanding qualities of Anil Naik: One, he stands apart as a person who can continuously transform himself. Two, he is an human resource-oriented leader. According to Naik people come first, followed by strategy and finally process. His five-year plans called LAKSHYA – Lean, Agile, Knowledge, Speed and Scale, Humane, Yield and Action-oriented – reaped success. He is adept both at macro strategy formulation and micro level implementation.
Naik transformed a company with just $50 million annual revenue into a global player with a turnover close to $18 billion. His objective was to leave behind a globally competitive, profitable and secure company, which be future-ready. Over the last five years, he has divided L&T’s complex web of sixty-five businesses into twenty-one independent entities. Naik says “L&T had too many businesses and there was the need to reduce complexity by rationalising its portfolio so that it becomes a manageable company with a high degree of focus.”
In 2011, Naik explained the reasons why it was not easy to find a successor: “L&T is not one company, it is twenty-five companies. Can it be run by a single man? A man who would kill himself four times a day, has worked for more than a hundred years, has impeccabale devotion and passion and is not bothered about his own family is the man who can be my successor!” In 2015, Naik announced the completion of the succession planning exercise and on 30 September 2017, he stepped back from executive responsibilities.
No one is ireplaceable but Naik will forever be remembered for having been wedded to L&T forever and for having made it a global powerhouse during his five decades in the company. His philanthropic activities continue silently.